EE owners ready banks ahead of float

THE OWNERS of EE, the UK’s largest mobile network company, have readied banks to advise on a float or sale of the business that could value it at £10bn.

Sources close to France Telecom and Deutsche Telekom, which each own half of EE, said the firms had lined up advisers after months of speculation. France Telecom has hired Morgan Stanley and Bank of America Merrill Lynch on the deal, while Deutsche Telekom is believed to have lined up JP Morgan.

Deutsche Telekom used the same advisers in 2010, when it merged its T-Mobile UK network with France Telecom’s Orange to create EE.

The two companies are keen to raise cash, with Deutsche Telekom having to invest in infrastructure in Germany and the US and France Telecom hit by an increasingly competitive French market.

The two parties have both talked about floating part of EE, and it is likely that they would retain majority control of the firm between them, listing the minimum 25 per cent the London Stock Exchange allows.

A float would be one of the biggest initial public offerings in London in years, and could breathe life into a subdued market.

However, EE’s owners are also exploring a sale of a part of the company to a number of private equity firms who are circling the firm, with US mobile giant AT&T also understood to be in the running. AT&T is looking to make investments in Europe having reached the limit of its expansion in the US, with EE a prime target.

Although France Telecom and Deutsche Telekom want to retain control of EE, a source close to one of the companies admitted that “everything has its price”.

“There will certainly be twists and turns along the way,” the person added.

France Telecom, Deutsche Telekom, JP Morgan, Morgan Stanley, Bank of America Merrill Lynch and AT&T did not comment.